Summary 2018 Non-Residential Construction Market

Total non-residential construction for 2018 declined 3.5% by number of buildings to 55,220 units or by floor area by 2.1% to 39,772,196m2. The number of wooden units fell by 2.9% and floor area declined 3.5% to 3,768,354m2. Overall market share of wood held steady at 35% when measured by the number of buildings or at 9.5% by floor area. Overall estimated wood use in non-residential construction was 659,462m3. The top five end uses for non-residential wooden construction were as follows: (1) Medical, elderly care & social welfare facilities, Est. 172,857m3; (2) Mixed Residential/Commercial 97,687m3; (3) Agricultural Buildings 85,198m3; (4) Business/Commercial services 60,096m3 and (5) Restaurants & Accommodation 49,958m3.

Despite slight year over year declines in 2018, the trendline shows steady increases of wood use in non-residential construction: between 2011 and 2018 annual wooden non-residential floor area has increased by 600,000m2 and estimated annual wood use has grown by over 100,000m3.

Summary Review of 2018 Japan Housing Starts

In 2018 total housing starts declined 2.2% to 942,370 units. Wooden housing fell 1.1% to 539,394 units. As a percentage of overall housing, wooden homes increased to 57.2%, the strongest showing in over three decades. Of all housing, post and beam starts were the most resilient: falling 0.5% to 409,873 units. Non-wood others starts fell 3.0% to 284,103 units. Platform frame starts declined 2.6% to 116,988 units. Wooden prefab fell 5.8% to 12,533 units and total prefab fell 5.5% to 131,406 units. In terms of relative market share prefab housing fell half a percentage point and 2×4 housing was essentially stagnant at twelve and a half percent.

In recent months, we’ve been seeing some strength in single family custom ordered and speculative housing starts as we lead up to the implementation of the consumption tax hike of 8% to 10% coming in October of this year. Market feedback is indicating that construction activity should pick up over spring and summer. The strength in single family housing is also leading to a recent slight increase in overall average wooden floor area. On the downside, the environment for wooden multi-family apartments has been challenging. One of the key things we are hearing is that in 2018 the Ministry of Finance implemented some tightening measures for regional lenders which is resulting in significantly higher mortgage down payments for property developers. These credit restrictions appear to be restraining multi-family starts and the issue could be with us for some time.

Japan Housing Starts Summary for January 2019

January housing starts peaked out a 1.1% increase to finish at 67,087 units, but for wooden construction cheery news was in short supply. Owner occupied housing increased 3.3% for the 4th consecutive monthly gain, but rental housing dropped 12.3%. Wooden housing finished down 2.2% to 38,121 units. But by housing type there were clear winners and losers. Post and beam starts largely held their own, declining 0.5% to 29,308 units. Wooden pre-fab rose for a 4.5% to 951 units; albeit compared to a poor showing the year prior. Overall prefab fell 10.6% to 9,480 units. Platform frame starts tanked; falling 8.5% to 7,862 units. By housing type, the results for 2×4 housing were as follows: owner occupied custom homes increased 7.6% to 2,447 units; rental apartments fell a staggering 17.4% to 4,251 units and built for sale spec housing declined 2.2% to 1,144 units.

B.C. Minister Chow’s Visits Wooden Seniors’ Residence

On a recent trip to Japan, B.C. Minister of State for Trade, the Honourable George Chow visited a wooden elderly care facility in Tokyo with COFI and Canada Wood staff on March 18th. While touring the site, the minister was introduced to the project’s design and construction team members, and was very impressed to see so much Canadian wood products at Kamishakujii Kohoen, a seniors’ residence (44-rooms) under construction in Tokyo. The strong and sustainable building is 2-storey platform-frame fireproof structure with a total floor area of 2,305 m², utilizing both SPF dimension lumber and Oriented Strand Board (OSB) from Western Canada in its construction. The facility was designed by Yoshitaka Architects Engineers & Consultants, the general contractor for the project is Nagai Komuten and sub-contractor for the fireproof 2×4 structure wood structure is Wing. This is the 20th 2×4 elderly care facility that this architect firm has designed in Japan over the last 12 years and happens to be the 4th 2×4 elderly project that Kohoen Social Welfare Corporation, the owner of this seniors’ residence has built since the chairman of this organization visited Canada to learn about platform-frame construction 10 years ago.

COFI Midrise Wood Building Design Competition & Awards Ceremony

COFI conducted its second Wood Midrise Design Competition this fiscal year, which began October 17, 2018 and applications from architects and construction firms were received until January 18nd, 2019. Judging for the competition was done on February 4, by three independent leading academics in the field of Japanese architecture: Ms. Azuma, Mr. Koshihara and Mr. Harada. On March 6, an awards ceremony and reception was held at the Canadian Embassy to honour the selected building’s design and construction personnel, celebrate tall wood building innovation and raise awareness of the growth opportunities for four, five and six storey wood midrise construction in Japan. At the event a total of eight awards for midrise (four 4-storey, two 5-storey and two 6-storey) wood buildings (four 2×4 projects, two P&B projects and two CLT projects) were presented to the following companies: Architects Atelier, Koshigaya Architects & Associates, Shinshowa, MoNO plan, Maeda Corporation & Kengo Kuma and Associates, Yoshihiko Nakada Architects, Human Resource Communications and Takahashi Design & Planning. The design competition received extensive support from nine Japanese government and industry organizations, including MLIT, the Japan 2×4 Home Builders Association, the Japan Association of Architects and others. A total of 115 architects, structural engineers, builders, academics and code officials attended the awards presentation ceremony and reception. The design award competition and event met with very positive reviews and participants urged Canada Wood to continue this event in the future.

Additional Quick Fact:
According to the 2×4 Associations fireproof approval applications data, the total number of mid-rise 2×4 projects in Japan 4-storey’s or higher is 112 (February 28, 2019) and breakdown as follows:

4F – 99 projects
5F – 12 projects
6F – 1 projects